* TSX ends down 0.2% at 20,919.64

* Communication services sector leads declines

* Lightspeed Commerce shares tumble 24.4%

* Muddy Waters shorts insurer Fairfax

Feb 8 (Reuters) - Canada's main stock index fell on Thursday as bond yields climbed and the communications sector lost ground ahead of a domestic employment report that could guide expectations for Bank of Canada interest rate cuts.

The Toronto Stock Exchange's S&P/TSX composite index ended down 49.54 points, or 0.2%, at 20,919.64, adding to its weekly decline.

"The cold reality of economic data - resilient growth in the U.S., high inflation, wage inflation - is now causing the market to rethink how soon we are going to get these interest rate cuts", said Brian Madden, chief investment officer at First Avenue Investment Counsel Inc.

Members of the Bank of Canada's governing council were concerned about cutting borrowing costs too soon amid persistent inflation when they decided to keep the key overnight rate on hold on Jan. 24, minutes published on Wednesday showed.

The Canadian employment report, due on Friday, is expected to show the economy adding 15,000 jobs in January.

Canada's 10-year yield was up 9.2 basis points on Thursday at 3.570%, its highest level since Dec. 1.

The communication services sector which includes high-dividend paying stocks that could particularly benefit from rate cuts, fell 1.9%.

It was pressured by a 3.8% decline in the shares of BCE Inc after the telecom company announced its largest workforce reduction in nearly three decades.

Utilities fell 1.3% and the materials group was down 0.9% as concerns over China's ailing economy weighed on base metal prices.

Lightspeed Commerce shares tumbled 24.4% after the software company forecast revenue figures for 2024 below analyst estimates. Still, technology rose 1%.

Short seller Muddy Waters has placed bets against the shares of insurer Fairfax Financial Holdings Ltd alleging manipulation in its asset value. Fairfax's shares lost 11.9%. (Reporting by Fergal Smith in Toronto and Purvi Agarwal in Bengaluru; Editing by Tasim Zahid and Sandra Maler)